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RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol. 1, No. 148, Part II, 29 October 1997



A daily report of developments in Eastern and Southeastern Europe,
Russia, the Caucasus and Central Asia prepared by the staff of Radio
Free Europe/Radio Liberty.

This is Part II, a compilation of news concerning Central, Eastern, and
Southeastern Europe.  Part I covers Russia,
Transcaucasia and Central Asia and is distributed simultaneously as a
second document.  Back issues of RFE/RL NewsLine and the OMRI
Daily Digest are online at RFE/RL's Web site:
http://www.rferl.org/newsline

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Headlines, Part II

* STOCK MARKET SLUMP HITS REGION

* KUCHMA, MARCHUK TO CONTEND 1999 ELECTIONS

* INTERNATIONAL COMMUNITY TO DECIDE FOR BALKING BOSNIAN
LEADERS?

End Note : WHEN STATES LOSE CONTROL

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EAST-CENTRAL EUROPE

STOCK MARKET SLUMP HITS REGION. The Tallinn stock market fell
12.46 percent on 28 October, making for a 22 percent decline in the
past week. Analysts are divided over whether the current slump on
the Estonian market is linked to international trends. In Riga, the
index fell some 1.85 percent, while the drop in Vilnius was similar to
that in Tallinn. In Warsaw, the share index fell by 9.8 percent. The
zloty dropped against the dollar to 3.55, down from 3.44 the
previous day. The Prague market was closed for a holiday, but the
crown fell against the dollar from 33.25 to 33.63. The Budapest Stock
Exchange dropped by 16 percent, which was the biggest single-day
loss in its history. The Bucharest index was down 12 percent, while
the Ljubljana market dropped 5 percent.

KUCHMA, MARCHUK TO CONTEND 1999 ELECTIONS. Ukrainian
President Leonid Kuchma has announced on state television that he
will run for a second term in the 1999 presidential elections,
provided the country's economic situation does not deteriorate,
Interfax reported on 27 October. Former Prime Minister Yevhen
Marchuk, who was dismissed by Kuchma in 1996 and is a member of
the moderate centrist United Social Democratic Party, has also
announced his candidacy. The next day, "Nezavisimaya gazeta"
reported that Crimean Tatar activists Mustafa Djemilev and Nadir
Bekirov are included on the Popular Rukh party's list of candidates to
contend the March 1998 parliamentary elections. Also on 28 October,
parliamentary speaker Aleksandr Moroz told ITAR-TASS that
Ukraine is not yet ready to abolish the death penalty.

UKRAINIAN ECONOMY CONTRACTS. During the first nine months of
1997, GDP fell by 5 percent compared with the same period in 1996,
Interfax reported. But the rate of decline of industrial production has
slowed from 6 percent in the first quarter to 2.4 percent for the first
nine months. Agricultural output fell by 6.3 percent compared with
the first three-quarters of 1996. Consumer prices rose by 6.7
percent, while the comparable figure for last year was 34.8 percent.
Foreign trade from January to August 1997 was down 4.5 percent
from 1996, at $23.98 billion. Trade with CIS and the Baltic States fell
from 63.2 percent of total foreign trade to 53.2 percent.

BALTS TO PONDER RUSSIAN SECURITY OFFER. Presidents Lennart
Meri (Estonia) and Guntis Ulmanis (Latvia) are to look carefully at
Russia's offer of security guarantees, which they received in writing
on 27 October, ETA and BNS reported. Lithuanian President Algirdas
Brazauskas has proposed that the three Baltic heads of states meet to
discuss the offer. He has also said the presidential Foreign Policy
Coordination Council will consider the initiative in the next few days.
Meanwhile, Lithuanian Foreign Affairs Minister Algirdas Saudargas
told the Polish newspaper "Zycie" that Vilnius will reject the offer. "It
is sufficiently clear if we say that we need no such guarantees," he
commented. Sergei Prikhodko, Yeltsin's foreign policy adviser, has
said Russia expects an "adequate answer" to the offer.

BRAZAUSKAS TESTIFIES IN 1991 PUTSCH TRIAL. Lithuanian
President Brazauskas on 27 October gave testimony in a closed
courtroom at the trial of six pro-Soviet activists charged with
organizing the January 1991 putsch in Vilnius, dpa reported, citing
ELTA. Brazauskas was deputy premier and head of the reformed
communist Lithuanian Democratic Labor Party at the time of the
putsch. He was summoned to the court at the request of the
defendants, who include Mykolas Burokevicius, the former head of
the Moscow-loyal Lithuanian Communist Party. Brazauskas
reportedly said he had little information to offer the court. He also
said he did not know who had organized the civilian blockade outside
the television tower, where 14 unarmed civilians were shot dead by
Soviet troops.

LITHUANIAN PARLIAMENT VOTES TO PERMIT DEPUTY'S ARREST.
The parliament on 28 October voted to permit the arrest of Audrius
Butkevicius, an independent deputy and former defense minister,
who has been charged with corruption. Before the vote, Prosecutor-
General Kazys Pednycia produced evidence showing that Butkevicius
was impeding an investigation into his case, trying to influence
witnesses, and destroying evidence, dpa reported. In August, police
caught Butkevicius in the act of accepting $15,000 in cash from a
Lithuanian businessman. Butkevicius had allegedly promised to use
his influence to press for the closure of a fraud case involving the
businessman's company.

BUZEK REVEALS SOME CANDIDATES FOR NEW CABINET. Polish Prime
Minister-designate Jerzy Buzek on 28 October announced he has
nominated former steel mill chief Emil Wasacz of Solidarity Electoral
Action (AWS) to head the key Treasury ministry overseeing
privatization. Ryszard Czarnecki, leader of the Catholic group within
the AWS, will head the European Integration Committee, while Jacek
Janiszewski (AWS) will return to the Agriculture Ministry, where he
was once acting head. Freedom Union (UW) leader Leszek
Balcerowicz will be a deputy premier and finance minister. Bronislaw
Geremek, head of the UW's parliamentary caucus, is slated to head
the Foreign Ministry and former Prime Minister Hanna Suchocka
(UW) the Justice Ministry. Janusz Onyszkiewicz (UW), a former
defense minister, is named to take over that position again. The
complete cabinet lineup is expected to be announced on 29 October.

CZECH PREMIER ON COALITION CRISIS. Vaclav Klaus told reporters on
28 October, the 79th anniversary of the founding of the Czechoslovak
state, that the Czech Republic is jeopardizing its chances to join NATO
and the EU by displaying "political instability". He expressed the hope
that the appointment of new interior and foreign ministers will lead
to the rapid restoration of stability, CTK reported. At a ceremony
marking the anniversary, President Vaclav Havel said the civic
solidarity that followed the summer floods shows the "large hidden
ethical potential" that "slumbers" in Czech society. He commented
that the more solidarity is shown at the grass-roots level, the more it
will eventually emerge at the national level as well.

SLOVAK PRESIDENT HOPES FOR RUSSIAN ECONOMIC PROSPERITY.
Michal Kovac, in an interview with ITAR-TASS on 28 October, said
Slovakia is interested in Russia's implementing market reforms and
entering a period of prosperity "as soon as possible." He said relations
between the two countries have reached a "high level of
development" and have "a wonderful perspective" based on the
"further development of democracy and expansion of integration
processes in Europe." Kovac also said that Bratislava follows Russian
developments carefully and "rejoices at [its] successes and grieves at
setbacks."

SLOVAK RULING PARTY ASKS COURT TO RULE ON KOVAC'S TENURE.
The Movement for a Democratic Slovakia (HZDS) has called on the
Constitutional Court to rule when President Kovac's term in office
expires, Reuters reported on 28 October. A spokeswoman for the
court said the appeal was submitted by a group of HZDS deputies. She
noted there is no legal deadline by which the court has to reach a
decision. Kovacs argues his term ends on 2 March 1988, the fifth
anniversary of his inauguration, while Premier Vladimir Meciar
claims it ends in February 1998, the fifth anniversary of his election.

MECIAR REJECTS DISCUSSING MINORITIES AT GABCIKOVO TALKS. In
a letter his Hungarian counterpart, Gyula Horn, Meciar has rejected
any discussion of other outstanding bilateral issues at talks on
settling the Gabcikovo-Nagymaros dam dispute. Hungarian media
reported on 28 October that Meciar said Slovakia is not setting any
preconditions for the start of negotiations following the ruling of the
International Court in The Hague and that Hungary should also
refrain from so doing. The letter came in response to a message from
Horn suggesting that the two countries also settle their disputes over
the status of minorities and over the reconstruction of a bridge
destroyed during World War II.

HUNGARIAN UNEMPLOYMENT REACHES RECORD LOW. According to
the Central Statistics Office, unemployment dropped to 8.1 percent in
the third quarter of 1997, its lowest level since 1989, Hungarian
media reported on 28 October. With 346,000 people registered as
unemployed, the figure is 0.5 percent down on the previous quarter
and 1.2 percent down on the same period of 1996.

SOUTHEASTERN EUROPE

INTERNATIONAL COMMUNITY TO DECIDE FOR BALKING BOSNIAN
LEADERS? Carlos Westendorp, the international community's chief
representative in Bosnia, said in Sarajevo on 28 October that major
world powers are growing impatient because the Serbian, Croatian,
and Muslim members of the joint presidency have not agreed on
basic issues such as joint citizenship, a common currency, and state
symbols. Hans van den Broek, the EU's commissioner for external
affairs, added that the international community may "impose certain
measures on the basis of [the] Dayton" agreements if the deadlock
continues. Observers noted the Serbs have been the main obstacle to
reaching a decision. The governing Bosnian Serb party does not
believe in a unified Bosnia and would prefer to partition the country.

MAJOR U.S. ARMS SHIPMENT ARRIVES IN BOSNIA. A U.S. ship
delivered some 100 155mm howitzers to Bosnian army authorities at
Croatia's port of Ploce on 28 October. Washington sent the artillery
pieces in addition to the $100 million-worth of military aid it has
promised to the mainly Muslim and Croatian army under the "Train
and Equip" program. Critics in western Europe and Russia say that
the program upsets the military balance in Bosnia. Washington, for
its part, argues there is no balance because the Bosnian Serbs'
military structures are still closely integrated with Yugoslavia's.

BOMB HITS BOSNIAN SERB POLITICAL OFFICE. A bomb damaged the
headquarters of the ultra-nationalist Serbian Radical Party in
Bijeljina on 28 October. There were no injuries. The Belgrade-based
Radicals are led by Vojislav Seselj, who led paramilitary units during
the wars in Croatia and Bosnia. One week earlier, an explosion in
Bijeljina blew up a television transmitter used by hard-liners
("RFE/RL Newsline," 21 October 1997). Meanwhile near Muslim-held
Travnik, a sniper killed one ethnic Croat and wounded two more on
27 October. Two Croats were killed by unknown assailants there in
August.

MUSLIMS ACCUSE MONTENEGRIN PRESIDENT OF HATE-MONGERING.
The Muslim National Council of Sandzak, which represents
Yugoslavia's Muslim population, has accused Montenegrin President
Momir Bulatovic of spreading "outright hatred and hostility" against
Yugoslavia's ethnic Muslims, BETA reported on 28 October. The
Council charged that Bulatovic and his backers have repeatedly used
inflammatory language at mass meetings to blame Muslims for
Bulatovic's loss of the Montenegrin elections on 5 October. The
resolution added that state-run Serbian media have helped Bulatovic
to spread ethnic hatred.

SKINHEADS INJURE TWO ROMA IN BELGRADE. A group of skinheads
severely beat a Romani brother and sister in the Serbian capital on
27 October. Political opposition groups and non-governmental
organizations condemned the attack and blamed the government of
Yugoslav President Slobodan Milosevic for creating what they called
a growing atmosphere of intolerance. The attack came ten days after
Belgrade skinheads killed a Romani teenager, which observers called
the first murder of a Rom by Serbian skinheads in a hate-crime (see
"RFE/RL Newsline," 21 October 1997). Romani spokesmen say
skinheads have harassed Roma in Yugoslavia for years.

CROATIAN RIGHTS GROUP ACCUSES TUDJMAN OF RACISM.
Spokesmen for the Croatian Helsinki Committee said in Zagreb on 28
October that President Franjo Tudjman made blatantly racist
remarks at a meeting of the youth organization of his Croatian
Democratic Community two days earlier. The committee charged that
Tudjman violated the Croatian Constitution and international
agreements when he allegedly referred to the "genetically
programmed internal and external enemies of the Croatian state."

MAHATHIR WANTS TO JOIN SLOVENIA ON BOSNIAN MARKET.
Malaysian Prime Minister Mahathir Mohamad told his Slovenian
counterpart, Janez Drnovsek, in Ljubljana on 28 October that his
country is interested in closer cooperation with Slovenia, particularly
with its metal industry. He added that Malaysia regards Slovenia's
port of Koper as very important for doing business in central Europe.
Mahathir also suggested that Slovenia and Malaysia cooperate on the
Bosnian market. Kuala Lumpur enjoys close relations with Sarajevo
and provided military, economic, and diplomatic support to the
Muslims during the Bosnian war.

ALBANIAN DEMOCRATS END HUNGER STRIKE AFTER COMPROMISE
OVER TV. Four Democratic Party legislators ended their hunger strike
on 28 October after their party reached a compromise with the
government coalition at a meeting of the all-party parliamentary
media commission (see "RFE/RL Newsline" 22 October 1997). The
parties agreed that state radio and television will devote air time to
the activities of opposition parties proportional to the percentage of
votes each of those parties won in the last elections. The commission
also agreed to establish an independent television monitoring body
in cooperation with local NGOs, an RFE/RL correspondent reported
from Tirana.

DEMOCRATIC PARTY KEEP VETERAN LEADERS. The Democratic Party's
National Council has elected a 20-member steering committee,
"Rilindja Demokratike" reported on 28 October. Party chairman Sali
Berisha will have Genc Pollo, his former presidential press
spokesman, as his deputy. Ridvan Bode, another party leader who
was prominent in Berisha's government, is secretary-general. Berisha
said he wants to begin a dialogue with other conservative parties,
stressing that "anti-communism unites us." Observers noted,
however, that most other conservative parties are unlikely to accept
overtures from the Democratic Party as long as Berisha is its leader.

OWNER OF ALBANIAN PYRAMID GETS FIVE YEARS. A Tirana court on
27 October sentenced Maksude Kadena, owner of the Sude pyramid
investment scheme, to five years in prison. Kadena was arrested and
charged with fraud in January, one month after her pyramid scheme
collapsed. Investigators said some 20,000 people invested a total of
$60 million in the scheme. Kadena will have to serve only a total of
three years and four months because she turned herself in under an
amnesty program.

ROMANIAN 'REVOLUTIONARY' SETS HIMSELF ABLAZE. One of the
"revolutionaries" on hunger strike in Bucharest set himself ablaze on
29 October, Mediafax reported. He was taken to the hospital but
refused medical care and left the premises shortly after. The
"revolutionaries" belonging to the group headed by Dan Iosif are
threatening to follow his example, with one striker setting himself on
fire each day. On 28 October, the "revolutionaries" belonging to the
UNORD association ended their hunger strike following the signing of
a protocol with representatives of the ruling coalition. The protocol
provides for setting up commissions composed of coalition and
UNORD representatives to review the government-proposed
amendments to the law on benefits for the "revolutionaries."

YUGOSLAV DEFENSE MINISTER IN ROMANIA. Pavle Bulatovic and his
Romanian counterpart, Victor Babiuc, met in Bucharest on 27 October
and signed a military cooperation agreement, RFE/RL's bureau in the
Romanian capital reported. Bulatovic emphasized that the accord is
not directed against any other state. He also met with Foreign
Minister Adrian Severin and the chairmen of the parliamentary
Defense, Public Order, and National Security Commissions.

FOREIGN INVESTMENT IN ROMANIA. The Agency for Development on
27 October announced that foreign investment in the country since
1990 totals $3.4 billion. An RFE/RL correspondent in Bucharest
quoted economic analysts as saying this amount is far lower than in
other former communist countries. Also on 27 October, visiting
USAID director Brian Atwood said the U.S. will increase assistance for
Romanian economic reforms above the $35 million granted in 1997.
He also said USAID intends to set up in Romania an information
center on accelerating privatization.

RUSSIAN STATE DUMA SPEAKER IN MOLDOVA. Gennadii Seleznev,
who is on a three-day visit to Moldova, said after talks with
President Petru Lucinschi on 28 October that Russian parliamentary
factions will finish examining the basic treaty with Moldova in mid-
November. He said he that he believes the treaty, initialed in 1990,
will be ratified by the end of 1997. Chairman of the Transdniester
Supreme Soviet Grigorii Marakutsa told journalists after his meeting
with Seleznev in Tiraspol that the separatists are opposed to the
ratification of a document worked out seven years earlier, before the
split between Tiraspol and Chisinau. He also said Tiraspol wants to
participate in the drafting of a new treaty together with Russia "and
Moldova," RFE/RL's Chisinau bureau reported.

BULGARIA WANTS TO KEEP KOZLODUY OPERATING. The government
has appealed to international lenders to agree to the continuation of
operations at the aging Kozloduy nuclear power plant, citing
economic hardships, RFE/RL's Sofia bureau reported on 27 October.
In 1993, Bulgaria agreed to close four of the six units at the plant by
the end of 1997 in exchange for a $26 million loan.

BULGARIA ADMITS ROLE IN INTERNATIONAL DRUG TRAFFICKING.
An Interior Ministry official on 28 October said more than 1,600
Bulgarian citizens have been involved in drug smuggling and 112
Bulgarian firms used as "covers" for international drug trafficking,
Reuters reported. Bozhidar Popov told journalists that international
criminal groups are involved in those operations. He also said
growing drug consumption in Bulgaria is contributing to crime,
including murders.

END NOTE

WHEN STATES LOSE CONTROL

by Paul Goble

        Diplomats have never found it easy to resolve conflicts. But in
recent years, they have faced an ever more daunting obstacle to
making peace: the increasing ability of individuals and groups to
sabotage whatever accords their governments may agree to.
        Nowhere has this problem been greater than in post-
communist conflict zones such as the southern Caucasus and the
former Yugoslavia. In both regions, the power and authority of
political leaders are relatively weak, many individuals and groups in
the population are well armed, and many of those groups enjoy the
direct or covert support of other governments that benefit from
conflict situations.
        Such factors reduce the effectiveness of traditional diplomacy
except when it is backed by force. But even when they have not
prevented diplomatic negotiations, they have defined how
governments choose to participate in talks.
        Indeed, those factors are probably more important in
determining what diplomacy can achieve and what it cannot than is
the "extreme nationalism" that outsiders usually invoke to explain
why no agreements seem to be possible. But because representatives
of major outside powers sometimes do not take those factors into
account when they attempt to intervene diplomatically, they often
unintentionally lead the governments directly involved to behave in
ways that preclude rather than produce peace.
        Efforts by the international diplomatic community to resolve
the conflict over Nagorno-Karabakh are perhaps the clearest example
of that predicament. Neither Baku nor Yerevan is fully in control of
its own population, much of which is deeply committed to prolonging
the conflict until their particular goals are achieved. Groups in both
countries have been willing to undermine efforts to reach
agreements in the past, sometimes by passive resistance and
sometimes by the use of violence, including attacks on individuals
and on economic infrastructure such as pipelines and power
networks.
        Nor does Yerevan have much leverage over the Karabakh
Armenian leadership, which has enormous resources, including the
possibility of violence, to undermine any agreement. As a result,
some members of the Armenian leadership have been reluctant to
agree to anything that might either cost them popular support or
ignite violence against themselves. Some Azerbaijanis, for their part,
have been willing to support authoritarian measures by their own
government in order to create a situation whereby an agreement
might be possible, one that would allow oil to flow and to enrich their
country.
        The fundamental disagreement between the three conflict
parties on the relative merits of a "phased" as opposed to a "package"
solution to the conflict further complicates the international
diplomatic effort to achieve a lasting peace in the region.
        Meanwhile, the situation in Bosnia-Herzegovina suggests that,
even in an age when non-governmental groups are playing an
increasingly large role, the diplomacy of states can achieve a great
deal if it is backed by another major resource of today's nation state:
the use of force.
        NATO-led troops on the ground in Bosnia-Herzegovina have
ended most of the violence and given both diplomats and
governments there the possibility of dealing with the situation in a
non-violent way. This application of force is, of course, by no means
certain to solve the situation in the former Yugoslavia. But it has
restricted the activities of independent individuals and groups and
thus given the states a chance to act in a more traditional way.
        The contrast between the cases of the southern Caucasus and
the former Yugoslavia has highlighted the importance of building
strong political institutions. Unless they exist or have the chance to
grow with some protection from outside, individuals and groups
living inside those states may make it impossible for anyone to make
peace and move on to a better future.


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